UPDATE 10-Oil up after 5-year low in Brent; traders wary of more downside

UPDATE 10-Oil up after 5-year low in Brent; traders wary of more downside

09 December 2014 10:18

UPDATE 10-Oil up after 5-year low in Brent; traders wary of more downside

* Brent makes first gain after 5 days of losses
* Brent touches 5-year low of $65.29 earlier on Tuesday
* Brent and U.S. crude down more than 4 pct on Monday
(Updates with weekly build in U.S. crude inventory reported by
API, paragraphs 8-9)
By Barani Krishnan
NEW YORK, Dec 9 (Reuters) - Brent oil prices ended higher on
Tuesday after touching a 5-year low and following five straight
days of losses, while U.S. crude also rose as players looked for
a sustainable price in a market haunted by oversupply concerns.
Sentiment in oil was aided somewhat by a weaker dollar
, which boosted the value of commodities denominated in
the currency, traders said.
Lower capital expenditures for next year planned by oil
companies such as ConocoPhillips also helped as they
indicated less drilling and production.
But fear of a further slide after a 40 percent drop in
Brent's value since June kept market bulls away, analysts said.
New U.S. projections estimating a growth of more than
100,000 barrels per day in production by January from the big
three U.S. shale plays also offset some of the positive impact
from oil firms' planned capital expenditure reductions.
Brent's front-month futures contract settled up 65
cents, or 1 percent, at $66.84 a barrel. Earlier in the session,
it fell to as low as $65.29, its weakest since September 2009.
On Monday alone, Brent lost $2.88, or 4.2 percent, for its
third-largest one-day loss this year.
U.S. crude futures finished up 77 cents at $63.82 a
barrel, after swinging between a high of $64.20 and low of
$62.25. It fell $2.79, or 4.2 percent, on Monday.
Both crude markets pared their gains in post-settlement
trade after the American Petroleum Institute, an industry group,
reported a 4.4 million barrel build in crude stockpiles last
week.
Analysts had expected the API to report an inventory drop of
2.2 million barrels. The Energy Information Administration will
issue on Wednesday official stockpiles data for last week.
"We're just treading water if you ask me," Gene McGillian,
senior analyst at Tradition Energy in Stamford, Connecticut,
said, referring to Tuesday's higher close in Brent and U.S.
crude.
An oil official from the United Arab Emirates said on
Tuesday that supply and demand will determine oil prices in
coming months, the latest sign that Gulf members in the
Organization of the Petroleum Exporting Countries were ready to
weather lower prices after deciding to not cut output last
month.
The tumble in crude futures has been exacerbated by price
cuts made by Saudi Arabia and Iraq to exports to the United
States and Asia as the largest producers in OPEC tried to
compete for market share.
(Additional reporting by David Sheppard in London and Adam Rose
in Beijing; Editing by Michael Urquhart, Chizu Nomiyama, Richard
Chang and Chris Reese)